An Algerian court has ruled that Saipem “inflated prices” on a project it worked on 14 years ago, prompting the Italian contractor to appeal the decision.

However, the court dismissed two other charges against the Milan-based company involving capital movements and 'trafficking in influence."

The rulings arose from a case heard last month at the Court of Algiers that focused on front-end engineering and design work Saipem carried out in 2008 on the Rhourde Nouss QH project

Yesterday, Saipem said it was acquitted of the crime of “violation of laws and regulations concerning exchange and transfer of capital to and from abroad” and the crime of “trafficking in influence”.

However, the court found the Italian contractor liable for another crime.

Saipem said in its statement that this liability related to “inflating the price on contracts awarded by a public company engaged in industrial and commercial activities, taking advantage of the authority or influence of representatives, to obtain advantageous prices compared to those normally charged, or to modify, to their advantage, the quality of the materials or services or the delivery or supply times”.

As a result, the court imposed a fine equivalent to about €34,000 ($36,835) at yesterday's exchange rate.

With reference to claims brought by state-owned Sonatrach and the Algerian Treasury as civil plaintiffs, the Italian contractor “noted the absence of compensatory claims by Sonatrach against Saipem”, although the court did uphold “in minimal part” the claims brought by the Treasury.

This ruling requires the Treasury to be paid compensation of some €680,000, with Saipem's pro rata share of this amount being about €170,000.

Saipem said it “will appeal the condemnatory content of the ruling by the Court of Algiers.”

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